Obama discusses fiscal cliff, Libya

In his first news conference since winning re-election, President Barack Obama on Wednesday showed himself ready to go toe-to-toe with Republicans.

KATHLEEN HENNESSEY and CHRISTI PARSONSTribune Washington Bureau

WASHINGTON -- In his first news conference since winning re-election, President Barack Obama on Wednesday showed himself ready to go toe-to-toe with Republicans over fallout from the deadly attack on the U.S. Consulate in Libya, even as he left open the door to compromise over year-end tax increases. Speaking in the East Room, the typically cool Obama displayed a rare flash of anger in defending Susan Rice, the U.S. ambassador to the United Nations, whom some Republicans have accused of spreading inaccurate information about the Sept. 11 attack on the diplomatic outpost in Benghazi. Rice is a potential pick for secretary of state in Obama's second term, although some GOP senators have sworn to block her nomination. Sens. John McCain, R-Ariz., and Lindsey Graham, R-S.C., were picking on an "easy target," he said. If they "want to go after somebody, they should go after me." The tough talk was a clear contrast from Obama's core post-election message: He's ready to deal with House Republicans to avoid the tax hikes and spending cuts that are scheduled to take effect in the new year, which could smack the economy back into a recession. Obama sought to pressure Republicans to act now on a Senate bill that would extend the current lower tax rates for most taxpayers, but suggested that he was willing to bend on one of the key sticking points: how high to boost rates on wealthier taxpayers. "With respect to the tax rates, I just want to emphasize: I am open to new ideas," he said. Obama offered hints about his strategy for pursuing immigration reform, which he said would come early in his second term, and suggested he could improve his outreach with Republicans, including his vanquished opponent, Mitt Romney, whom he awkwardly praised for doing "a terrific job running the Olympics." He also weighed in on the scandal involving former CIA Director David H. Petraeus and Gen. John Allen, commander of U.S. and international forces in Afghanistan, which has become an enormous distraction just as Obama had hoped to focus on the federal budget. "I have no evidence at this point from what I've seen that classified information was disclosed that in any way would have had a negative impact on our national security," he said. The president's remarks, and shifting tone, reflected the mix of issues that await him. As Obama lays the groundwork for his second term, he will look to a familiar cast of characters on Capitol Hill for aid with legislation, a potentially legacy-making tax and budget deal, and nominations to replace Cabinet secretaries. The fight over one post is brewing even before Obama names his choice. Graham and McCain have pounced on talk of Rice's possible nomination and used it as a cudgel in the fight over when the White House knew what prompted the Sept. 11 attack that killed four Americans, including the U.S. ambassador to Libya. Republicans have accused the administration of downplaying the incident for political reasons when U.S. officials initially described it as a spontaneous reaction to an anti-Islamic film, rather than a terrorist attack. Rice was among the first administration officials to make extended comments on the matter. "To besmirch her reputation is outrageous," Obama said. He understood the debate over whether the Benghazi compound was properly secured, he said, "but when they go after the U.N. ambassador, apparently because they think she's an easy target, then they've got a problem with me." McCain took to the Senate floor to respond. "This president or this administration has either been guilty of colossal incompetence or engaged in a cover-up," he said. Obama will have to try to keep the heated rhetoric from souring his first order of business - negotiations with Republicans to avoid the so-called fiscal cliff, the tax increases and spending cuts scheduled to take effect in the new year unless the White House and lawmakers compromise. Halting middle-class tax hikes would limit the threat, Obama said, adding, "We could get that done by next week." The Senate has already passed legislation that would preserve current rates for income up to $250,000 for families and $200,000 for individuals. Obama is scheduled to meet at the White House on Friday with congressional leaders from both parties. House Speaker John A. Boehner, R-Ohio, has made an opening offer that would extend all of the expiring tax rates another year while Congress and the White House work on a broader overhaul of the tax code, with the goal of closing loopholes and using the revenue to lower all tax rates. The White House has been cool to Boehner's offer, and Obama on Wednesday referred to the 2010 extension of the Bush-era tax cuts as "a one-time proposition." But he did not draw a red line on returning the tax rate on the wealthiest Americans to Clinton-era levels, which could mean he is open to a rate between the current 35 percent and the scheduled increase to 39.6 percent on the highest incomes. Obama suggested his next priority will be immigration, noting the key role Latinos played in the presidential election. Obama won more than 70 percent of the Latino vote. Key Republicans, anxious to increase their support from that fast-growing slice of the electorate, have signaled they are open to a comprehensive overhaul. (EDITORS: STORY CAN END HERE) The president said such a package would have to create a pathway to legal status for people living in the U.S. unlawfully, with measures requiring applicants to learn English and pay back taxes and a fine. It would also have to include strong border security and serious penalties for companies that hire undocumented workers, and protect young immigrants whose families brought them to the U.S. illegally but who have grown up here, gone to school and stayed out of trouble, he said. Before the election, Obama noted, he had predicted the Latino vote would "cause some reflection on the part of Republicans about their position on immigration reform." "I think we're starting to see that already," Obama said. "So we need to seize the moment." Lisa Mascaro, Paul Richter and Brian Bennett of the Tribune Washington Bureau contributed to this report.

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